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EU predicts 'deeper recession' in 2020 than expected
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SME Times News Bureau | 08 Jul, 2020
The European economy will face a
"deeper recession" than previously predicted due to the prolonged
containment measures on the Covid-19 pandemic, the European Commission
has said in its "Summer 2020 Economic Forecast". The 19-member
eurozone economy is projected to contract by about 8.75 per cent in
2020 before recovering at an annual growth rate of 6 per cent next year,
said the Commission on Tuesday, Xinhua reported. The
27-member European Union (EU) economy is forecast to contract by 8.3
percent in 2020 and grow by 5.8 percent in 2021, it said. Compared
with the spring forecast published in May, the summer one's projections
on economic contraction in 2020 are somewhat dimmer and recovery in
2021 slower. In its spring forecast, the Commission projected
that the eurozone economy would contract by 7.75 per cent in 2020 and
grow by 6.25 per cent in 2021, and the EU economy was forecast to
contract by 7.5 per cent in 2020 and grow by around six per cent in
2021. With a far longer period of disruption and lockdown
taking place in the second quarter of 2020, economic output is expected
to have contracted significantly more than in the first quarter, said
the Commission. Early figures for May and June have suggested
that "the worst may have passed," and recovery is expected to gain
traction in the second half of the year, it added. However,
the hit to the economy was so strong that the partial rebound in the
second half of the year will not be able to lift the annual growth rate
significantly, said Paolo Gentiloni, EU commissioner for the economy. "The
chart shows how far we will have to move away from the growth path that
we had expected before the pandemic occurred," he told the press on
Tuesday. According to Gentiloni, a similar trend was observed
in the world economy (excluding the EU). In the first quarter of 2020,
the world economy outside the EU is estimated to have contracted by more
than three percent quarter-on-quarter, partly because of the impact of
the anti-virus measures taken by China in the first three months. In the
second quarter, the world's output declined much deeper owing to the
global Covid-19 pandemic. "The still rising daily infections
at global level do not bode well for the world economy," said the
commissioner, who predicted a decline in the overall real global gross
domestic product (GDP), excluding the EU, of around four per cent in
2020 and a five-per cent recovery in 2021.
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Customs Exchange Rates |
Currency |
Import |
Export |
US Dollar
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66.20
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64.50 |
UK Pound
|
87.50
|
84.65 |
Euro
|
78.25
|
75.65 |
Japanese
Yen |
58.85 |
56.85 |
As on 13 Aug, 2022 |
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